Should I save or invest?

Do you understand the difference between saving and investing?

Michigan State University Extension recommends that you set some financial goals to become financially healthy. Often when creating financial goals, saving and investing is at the top of the list. However, it is important to understand the differences between saving and investing.

Saving focuses on creating funds for short-term goals like establishing an emergency, vacation, or general savings funds. Investing focuses on creating funds for long-term goals such as retirement. Generally, there is no risk involved with savings whereas with there is risk involved with investing.

eXtension shares the following chart to show key differences between savings and investing.


Investment Dollars

Savings $$

Investment $$


Involves risk

Easily accessible

Volatile in short time periods

Low return

Offer potential appreciation

Used for short-term goals

For mid- & long-term goals

Take the Money $mart Quiz to see how investing-savvy you are. Then consider taking the 11-unit home study course Investing For Your Future. It’s a course developed by the Cooperative Extension system to assist inexperienced investors in understanding investing.

Be sure to check out Money Management from MSU Extension for financial workshops offered throughout the year to help you become financially healthy. Additionally, you can take the Financial Health Survey at MI Money Health to assess if you are financially healthy and discover more ways you can improve your financial health.

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